CBH bids for malt assets

Brad ThompsonThe West Australian

CBH is going down to the wire in a controversial bid to buy Glencore's Australian malting assets in a deal worth hundreds of millions of dollars.

The WA co-operative is one of a handful of official bidders for Joe White Maltings but is up against global heavyweights Cargill, CK Life Sciences, Sumitomo and Malteurop.

They are believed to have just days to make final offers for JWM and a sale is expected to be completed within weeks.

Industry estimates on the value of JWM vary wildly but some are as high as $350 million.

CBH refused to make any specific comment on the bid yesterday but it is known the sale has major strategic ramifications for the grower-owned grain handler and marketer.

General manger of grower services Gavin Bignell said CBH did not comment on market speculation but added: "CBH looks at a range of opportunities and whether it can create and return value to growers and then decides whether to progress them or not."

The JWM facilities in WA are by far the biggest and the best of the plants in six States, positioned close to ports and transport links to premium barley growing areas.

The Forrestfield plant adjoins the CBH Metro Grains Centre and has rail access to Fremantle Port and the Kwinana grain terminal.

CBH has been considered a front-runner with Cargill, which owns malting plants across Europe, Canada and the US, and France's Malteurop.

The surprise bids have come from Japanese giant Sumitomo and CK Life, which is owned by multi-billionaire Li Ka-shing and his son Victor Li Tzar-kuoi.

Sumitomo has emerged as a major player in the Australian grain industry after buying grain storage and export terminal operator Australian Bulk Alliance and gaining half of grain marketer Emerald.

Hong Kong-based Mr Li is Asia's richest man, with a personal fortune of about $30 billion.

CK Life has been on a spending spree in Australia recently, buying Cheetham Salt for about $150 million late last year and gaining control of major turf companies Nuturf and Peaty Trading.

It is understood CK Life, part of Cheung Kong Holdings, wants to increase its food industry footprint by investing in Australia.

Glencore acquired JWM as part of its $6.1 billion takeover of Viterra. The malting business has made annual profits of about $30 million over the past five years despite regular ownership changes. It has a host of prestigious brewers among its clients and Australia-wide produces 520,000 tonnes a year for brewers across Asia and the Pacific and the local market.

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